Australia’s industrial & logistics sectors attract billions in investments

Australia has the tightest vacancy rate in the industrial and logistics sectors 

Construction costs are said to continue climbing throughout 4Q 2022, but experts believe that they will cool down next year, reported Australian Broker Online.

Tim Reardon, chief economist at the Housing Industry Association, said that there has been a significant improvement in the availability of several building materials, including timber, and that builders have been experiencing lesser supply pressures. 

While commercial transactions might have slowed after breaking a new record in 2021, Australia remains a top market for global investors, having garnered USD48.6 billion by the end of August 2022, down from USD96.7 billion last year, according to Elite Agent.

More: Australia’s industrial and healthcare real estate segments sees influx in demand

With a share of 43.3 percent, NSW is still a top choice for investors. This is an increase of five percent over last year’s figures. Markets like Queensland and WA, which were appealing last year, have now slowed.

Victoria has similarly raised its holdings on 2021 results, currently at 27.8 percent.

“Looking at asset classes, the confidence in office assets has returned while industrial sales have now moderated after a standout 2021, while retail, hotels, and medical/aged care have all seen uplift in activity this year too,” said Vanessa Rader, Ray White Commercial Head of Research.

Meanwhile, according to the latest figures, Australia has the tightest vacancy rate in the industrial and logistics sectors. In response to short supply, the sector is attracting billions in foreign investment, according to Australian Financial Review reporter Larry Schlesinger.

Industrial rents soared 30 percent in most of Sydney and more than 20 percent in Melbourne due to record low vacancy rates, reported Commercial Real Estate.

There is a strong landlord-friendly climate in industrial rental markets. Cushman & Wakefield’s joint head of industrial sales and leasing for Victoria, David Norman, says rents are growing at rates not seen in years and faster than most markets across the Asia Pacific due to very low vacancy rates and sustained demand.

The Property Report editors wrote this article. For more information, email: [email protected].